SEC Whistleblower Program
The SEC pays between 10 and 30 percent of what it collects when sanctions exceed $1 million. The award is real. So are the ways of losing it before anyone has read the information.
The program
Dodd-Frank made reporting worth something, and made it procedural.
The whistleblower program rewards a person who gives the SEC original information about a violation of the federal securities laws that leads to a successful enforcement action. Where the monetary sanctions ordered exceed $1 million, the award is between 10 and 30 percent of what is collected, with the percentage set by the Commission against published factors.
The same statute strengthened protection against retaliation, and the SEC will not reveal a whistleblower’s identity until it is required to disclose it to a defendant in a proceeding.
10–30%
of monetary sanctions collected, where the total ordered exceeds $1 million.
Where awards are lost
Almost none of it is about whether the tip was right.
The submission has to be made a particular way
Information only counts if it is submitted through the SEC’s online tip questionnaire or on Form TCR. An email to an examiner, a call to a regional office, a letter to a Commissioner — none of these start the clock. People who reported real misconduct have been held ineligible because of how they reported it.
Being second is being nowhere
The award goes to information the SEC does not already have. Once the conduct is known to the staff, the same information from a second person is worth nothing under this program, however accurate it is. Timing is a substantive term, not a preference.
Anonymity requires counsel
A whistleblower may submit anonymously only if represented by an attorney, who signs and holds the identifying information. For anyone still employed by the subject of the report, this is usually the whole question — and it cannot be fixed after filing under your own name.
There is also a decision no rule answers: whether to raise it internally first. Reporting through an employer’s own compliance channel can preserve eligibility if the employer passes it to the SEC, and it is what many people want to do. It also tells the subject of the report exactly who noticed. That is a judgment about a particular workplace, and it should be made before either step is taken.
What the firm does
A whistleblower can be anyone.
An investor who noticed something in a statement. An employee or compliance officer who raised it internally and got nowhere. A counterparty, a former colleague, someone with no connection to the firm at all. The program does not care who reports; it cares whether the information is original, voluntary and properly submitted.
For a person considering a report: assessing whether the information is original and whether it describes a securities violation, preparing a submission that is eligible, filing anonymously where that is the right call, and dealing with the SEC afterwards.
For a firm on the receiving end: responding to the investigation that follows, and, before any of that, building an internal reporting system that a person would actually use. A firm that hears about a problem first is in a materially better position than one that reads about it in a subpoena.
This page describes the program in general terms and is not legal advice; eligibility turns on facts and timing specific to each person. Whether the firm can act depends on a conflicts check, so please do not send confidential information before one has been completed. See our Attorney Advertising, Legal Notices & Disclaimers.